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Gold Falls as Consumer Confidence Surges (Update 1)

NEW YORK (
TheStreet) --
Gold prices dropped on Tuesday as a pop in consumer confidence and equities turned traders from the yellow metal's safe-haven appeal.

Gold for June delivery at the COMEX division of the CME closed off $7.70 to settle at $1,378.90 an ounce. The
gold price traded as high as $1,401 and as low as $1,372.10 an ounce, while the spot price was dipping $4.10, according to Kitco's gold index.

The Conference Board Consumer Confidence Index jumped to 76.2 in May, up from 69 in April, to post its highest point in five years.

"A lot of people think on equities that new high is going to be breached . . . so, still no reason to hold gold with very little inflation," said Phil Streible, a senior commodities broker at RJO Futures.

Prices received a slight boost when the S&P/Case-Shiller 20-city home price index posted a March increase of 10.9%, up from 9.3% in February. Economists polled by
Thomson Reuters were expecting prices to rise by 10.2%. The brief increase in gold on the housing news occurred because the larger-than-expected upswing in home prices suggests an upswing in inflationary pressure.

Gold mining stocks were mixed on Tuesday. Shares of
Kinross Gold(KGC - Get Report) were falling 2.8%, while shares of
NovaGold Resources(NG) were adding 2.2%.

Among volume leaders,
Barrick Gold(ABX - Get Report) was down incrementally at $19.16 a share.

Gold ETF
SPDR Gold Trust(GLD) was sliding 0.17% to $133.53, while
iShares Gold Trust(IAU) was down 0.3% to $13.41.